Economics · Structural Changes in Indian Economy
An analysis of the structural changes in the Indian economy from the 2000s to the present day reveals a sustained shift: the contribution of the Services Sector to India's GDP consistently exceeds 50%, while the share of the Agriculture Sector has steadily declined to below 20%. Despite significant government efforts like 'Make in India', the Manufacturing Sector's share has remained relatively stagnant at around 15-17%. Which of the following describes this unique structural nature of India's economic growth path, and what is the associated conceptual challenge it poses for employment?
- 1Structural Nature: Balanced Sectoral Growth. Conceptual Challenge: Increased current account deficit due to simultaneous high growth in all sectors.
- 2Structural Nature: Leapfrogging from Agriculture directly to Services. Conceptual Challenge: The services sector (particularly high-end IT and professional services) is generally less labor-intensive than manufacturing, making it difficult to absorb the large, semi-skilled labor force migrating from agriculture.✓
- 3Structural Nature: Manufacturing-led Growth (Second Industrial Revolution). Conceptual Challenge: Labor skills mismatch and dependence on raw material imports.
- 4Structural Nature: Agriculture-led Development. Conceptual Challenge: High pressure on the capital market to fund agricultural infrastructure projects.
Correct answer
Structural Nature: Leapfrogging from Agriculture directly to Services. Conceptual Challenge: The services sector (particularly high-end IT and professional services) is generally less labor-intensive than manufacturing, making it difficult to absorb the large, semi-skilled labor force migrating from agriculture.
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